Any doubts about how interconnected tourism is to the very core of this country’s existence have certainly been dispelled by the events of the last three months.
Those who have declared themselves from the travel and leisure industries have received their harshest lesson yet.
For the domino effect is still playing out before our eyes as those who operate in retail, banking, agriculture, transport, and most importantly, Government’s main tax-collecting arm – the Barbados Revenue Authority (BRA) – are all waiting patiently for the tourism sector to be revived and for revenues to begin flowing again.
Of late, we have heard frequent references that the Caribbean is the most tourism-dependent region in the world. In real terms, our undiversified economies rely so heavily on this industry that a major disruption to travel caused by the current health crisis has resulted in its collapse.
In The Bahamas, 70 per cent of the islands’ gross domestic product (GDP) is generated from tourism. And the World Economic Forum assessed that Barbados, Belize and The Bahamas are among the most exposed in the world to the sudden pause in global tourism.
Economic analysts with the ratings agency Standard & Poor’s forecast that tourism in the Caribbean will decline by about 60 and 70 per cent between now and year-end. They have noted that “this pandemic shock is unlike any shock that these sovereigns have seen in their history”.
Based upon the region’s unhealthy reliance on tourism, S&P has moved to downgrade the economies of Belize and The Bahamas, while the ratings firm has adjusted the outlook for Aruba, the Dominican Republic and Jamaica to negative.
Head of the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES) Dr Don Marshall will feel more than vindicated about his incessant pleas to successive administrations to diversify the economy away from its heavy reliance on tourism.
He has always insisted that the sector was too fickle and prone to collapse at even the hint of trouble. Back in the early 1990s, the University of the West Indies academic pushed the virtues of agricultural production and food security. He has been a strident supporter of manufacturing, insisting that there was a place in global trade for niche products from high-priced producers in Barbados as it was unlikely we could ever compete with the mass producers in places like China and the Far East.
Today, we must ask ourselves, are we prepared to bite the bullet and make room for the emergence of other sectors? Or will we give only lip service to other options until we are satisfied that tourism has found its footing again, only to become the darling at the expense of agriculture, alternative energy, manufacturing or agro-processing?
It will take bold leadership and some risk-taking to bet on this country’s ability to find an alternative to tourism which can absorb the tens of thousands who now make a living directly and indirectly from tourism. Some have suggested the St Kitts model which took a big gamble on economic citizenship. The dividends have paid well for the tiny CARICOM nation, so much so, that in 2014 it shocked many by paying off a quarter of its US$73.1 million debt to the International Monetary Fund (IMF) ahead of time.
We know tourism money is pumped into the economy easily. But without tourists, tourism-dependent countries face the real possibility of running out of US dollars needed to import fuel and food and service our debts. The question still remains: can we afford to continue hitching our wagon to this horse?
